Diseases affecting the lung's epithelium are not easily treatable and result in significant morbidity and mortality worldwide. Specialized stem cells with the potential to self-renew or give rise to differentiated, functional progeny have been proposed as a critical component of tissue homeostasis for many organs, including the lung. Different potential approaches for the use of stem cells for lung disease treatment include enhancement of endogenous stem cell differentiation or in vitro directed differentiation of stem cells to lung lineages followed by cell transplantation. Both approaches require that the identity and pathways of differentiation of lung stem or progenitor cells be known and well characterized. Embryonic stem (ES) cells have emerged in the last 10-15 years as a promising platform for the development of cell-based therapies, since they can transit through several defined stages in vitro to recapitulate mammalian development. In addition, induced pluripotent stem (iPS) cells offer an attractive alternative to human ES cells. iPS cells are easy to derive, are not fraught with ethical issues and offer the possibility of patient-specific therapies. Nevertheless, the presumptive lung progenitor cells in development have not yet been identified, and this represents a major hurdle limiting the use of ES/iPS cells for lung disease therapies. The overall objective of this project is to define the genetic program of the multipotent epithelial progenitors of the lung primordium. This represents the first step towards our long-term goal of developing cell-based therapies for diseases affecting the lung epithelium. Since the transcription factor Titf1 is the earliest known marker of lung development, we created a new genetic tool, the Titf1-GFP knock-in mouse. This mouse will be used to characterize the progenitor cells of the lungs and the thyroid, both Titf1-positive and of endodermal origin. Using this tool, we will be able in Aim 1 to isolate cells from lung primordium based on GFP fluorescence, define their genetic program by means of DNA microarrays and study the epigenetics of genes important in lung development. We will proceed in Aim 2 to examine the role of FGF and Wnt signaling in lung specification in vitro using the Titf1-GFP ES and iPS cell lines. FGF and Wnt ligands are known to induce lung fate within definitive endoderm in vivo and we will assess whether they have a similar function in vitro. In Aim 3, we will test the functionality of the in vitro derived lung progenitors using novel and established systems, such as a bioartificial lung and air-liquid interface culture respectively. We envision that the outcome of our studies will be to define the optimal protocol for derivation of lung progenitor cells from ES/iPS cells to be used in novel lung disease therapies.